An introduction to
life insurance

Life Insurance

Life Insurance Articles

Life Insurance

There are many options available for life insurance, and
for most people these options can be somewhat confusing. Below is a brief
review of each type and some advantages and disadvantages of each. When
choosing a policy it is important to look at the larger picture so that
you make a wise choice in terms of cost, coverage and benefits.

Term life insurance

These plans provide monetary
benefits only if death occurs within the time period that the insurance
is set for. Term insurance is generally most affordable and offers additional
savings for younger policy holders.

Permanent life insurance

This policy is a more long lasting
option for insurance. The premiums are higher, but there is not a term on
the length of time that the policy will pay out. Another benefit to these
types of policies is that some companies take the profit and reinvest it
and pay dividends to the policy holders. There are no taxes on these dividends
unless the holder accesses the cash value.

Whole life insurance

Another type of policy with a
cash value is the whole life insurance policy. These types of policies have
a set premium for the length of the policy. At policy inception and in the
early life of the policy rates are rather high compared to the risk of death,
but over time as the risk for death increases the policy remains low and
can be more affordable than other types of policies. Universal life insurance
A universal life policy combines the benefits of a term and whole life policy.
The policy provides for accumulation of cash reserves, which can be borrowed
against at a later time. Premium payments and coverage amounts can be varied
year to year

Variable life insurance

Variable life insurance is a
policy that has some similarities to an investment plan. The profits that
the company makes are reinvested into stocks and bonds, and these investments
affect the cash value that the policy carries. This can provide a greater
cash return on your policy, but it can also offer less as the money is tied
to market performance. Single premium policy

The single premium policy is
a unique type of insurance. This policy has one premium up front for the
amount of the life insurance coverage. This amount, while large, does have
some security behind it. It allows someone to give the policy as a gift,
or add it to an estate plan. There is no risk that the policy will be canceled
due to non payment, and this allows security if it is bought for someone
as a gift or as protection for the family for the future.

Survivorship policy

A new type of policy that has
been offered recently is a survivorship policy. This is a policy that covers
two separate people under one policy. After the first person dies, the remaining
person receives no benefits. There is no payout until both parties covered
under the policy have passed away. This type of policy might not make much
sense to people, until they consider that this policy is a great thing for
estate planning for children and other family members.

Now, how to decide what you need
and want out of a policy? The best thing is to take a look at your goals.
For example, Do you want a policy that remains unchanged, or one that can
be adjusted from time to time depending on your current life situation?
Do you view insurance as something that you get leave alone, or something
that can help you now as well as your survivors in the future?

Talking with a reputable insurance
agent can be helpful in terms of narrowing options and addressing the complex
array of needs a potential plan might fill. Many times, an agent can do
a profile on you and give you exactly what you need without the unnecessary
and often expensive extras.